What’s more, Bisie will play a pivotal role in supplying the world’s renewable power producers with enough tin over the next two or three decades to give credence to calls for an energy transition.
There are only a handful of mining projects in Africa that are bound to have a lasting impact on the continent’s mining landscape over the next decade or so. Bisie’s exceptional ore bodies will continue producing ore at an average grade of 4% tin for many years, steadying global stockpiles for which demand is expected to surge on the back of an energy transition and changing geopolitics.
Alphamin’s (TSX.V: AFM) Mpama South project, which is adjacent to the currently producing Mpama North mine, will soon produce approximately 7,200 tonnes of contained tin per year from 2024, thereby increasing Alphamin’s annual tin production to 20,000 tonnes.
Alphamin’s Bisie project has become the flagbearer of successful mine developments in Africa. Taking a greenfield project through the different stages of exploration, development, and into full production in a remote part of Africa, is not an easy task.
A lack of infrastructure, political interference, and negative perceptions, to name but a few constraints, have been the death knell for numerous promising mining projects across the continent.
Although countries like South Africa, Ghana, Mali, and the DRC have produced world-class mining projects over the years, African mining projects have historically taken the back seat in terms of project funding. The risks involved were simply a bridge too far for many conservative investors. However, the picture is changing rapidly, and the geopolitical pendulum has swung, arguably in favour of Africa.
Despite optimism, Africa faces challenges
But despite this hint of optimism, Africa faces tough challenges in 2023. Covid-19, lockdowns, and the Russia/Ukraine crisis have decimated economies. Lacklustre global growth, especially in China, soaring inflation, and exorbitant food and fuel prices curtailed any sign of growth in 2022.
Ironically, the same macroeconomic factors that have hampered the continent in 2022 and will continue to do so in the short term, will be the drivers of growth in the long term. For the first time in history, the African stars are aligned.
The global energy crisis and shortage of gas in Europe forced countries reliant on Russian and Ukrainian oil and gas, to find immediate solutions. Most turned to Africa’s hydrocarbon producers, and coal, oil, and gas companies in Africa made a killing in 2022 and will continue to do so in the next three to five years.
But the hydrocarbon solution is a short-term one. As the Just Energy Transition gains momentum, and with a Loss and Damage Fund taking shape in the wake of Cop27 in Egypt, African countries will be first in the line for reparations. With its abundant solar, wind, and hydrocarbon potential, the renewable energy boom in Africa is about to explode. The world is already pouring enormous amounts of money into energy projects across the continent, which bodes well for the future.
Tin critical for solar power
This is good news for tin miners around the globe and of course for Alphamin and its spectacular Bisie Complex, one of the leading producers of this critical mineral. Tin is crucial for solar power infrastructure. Solar panels are formed of many individual solar cells, connected by “solar ribbon”. This ribbon is a copper wire, coated in a thin layer of tin solder.
The ribbon carries the charge to the edge of the panel, where it feeds into junction boxes. This electrical system also requires solder connections for which tin is used, as does the grid infrastructure.
According to the International Tin Association (ITA) the use of tin in the solar sector has been rapid, growing more than six-fold in the past decade. ITA estimates the solar industry will have used over 22,000 tonnes of tin in 2022, passing the 20,000-tonne threshold.
Although the conversion from fossil fuels to renewables is gaining traction globally, most countries in the developing world still rely on coal to power their fledgling economies. However, coal demand is expected to ease off from next year, putting the focus squarely on renewables, especially in countries like China, where demand for solar power is at an all-time high.
According to Keisuke Sadamori, the International Energy Association’s (IEA’s) Director of Energy Markets and Security the world is close to a peak in fossil fuel use, with coal set to be the first to decline. “However, we are not there yet,” says Sadamori. “Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions. At the same time, there are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency, and heat pumps – and this will moderate coal demand in the coming years. Government policies will be key to ensuring a secure and sustainable path forward.”
All eyes on China
The world’s eyes will be on a Chinese recovery in 2023 and how the country navigates the energy transition through investment in the renewable sector. Currently, China is the world’s top consumer of tin and is a significant producer and huge market for photovoltaic solar panels (PVs).
Growth in the tin sector has been driven predominately by China, dominating production with an estimated 85% market share.
According to the ITA the PV industry now makes up 10% of China’s tin use and is already its third largest end-use sector. Demand for solar power does not seem likely to slow.
The ITA states that optimistic installation forecasts of 100GW for China in 2022 have been suggested – an 82% YoY increase from an already record-breaking 2021. “Perhaps unsurprisingly, a record number of modules were also exported to Europe, exacerbated this year by the drive away from reliance on Russian gas.”
Despite geopolitical tensions and the global economic quagmire in the aftermath of Covid-19, Alphamin stuck to its guns and realized its vision of becoming one of the world’s largest sustainable tin producers in 2022. It will most likely continue to do so in the next five to ten years.
Bisie is a top tin mine in Africa. Tin, along with battery minerals like lithium, copper, nickel, and REEs, forms the backbone of a new generation of “green” minerals, of which Africa has no shortage.
While Alphamin has continued to efficiently extract high-grade ore from its Mpama North mine at Bisie, its extensive exploration program has delivered excellent results and increased the life of mine at Bisie.
Alphamin now produces more than 4% of the world’s mined tin and with more market volatility and political instability expected in 2023, the company could increase that percentage to at least 5 or 6%.
Alphamin produced more tin than stated in the market guidance during the third quarter of 2022. The contained tin production of 3,139 tonnes was in line with the previous quarter and above market guidance of 3,000 tonnes.
Alphamin remains of the opinion that global tin supply is likely to be constrained during the next five years while demand for tin is expected to increase. The Mpama South project is progressing on schedule for targeted commissioning in December 2023. This market dynamic bodes exceptionally well for Alphamin (TSX.V) which is expected to remain a major supplier of tin in 2023 and beyond.
